In Shanghai and Hong Kong on January 20th, Chinese hedge fund managers are rushing to introduce investment products modeled after Bridgewater Associates' renowned "All Weather" strategy. The aim is to satisfy the growing demand from investors seeking protection against anticipated market volatility during Donald Trump's second term as U.S. President.
Ray Dalio's "All Weather" strategy, known for mitigating volatility across various assets, shielded Chinese clients from the impact of the Sino-U.S. trade tensions during Trump's initial term. With an impressive 37% return last year, Bridgewater's onshore China strategy outperformed many competitors.
Following Trump's election victory in November and the potential for increased trade tariffs on China, interest in the strategy has surged. Bridgewater, overwhelmed by the inflow of funds, had to limit the sales of its onshore products, leading to the launch of several competing products by at least a dozen hedge funds since the election.
Besides established players like SHQX Asset Management and Shanghai Luoshu Investment Co, numerous local and global hedge fund firms have introduced similar strategies. Shanghai Quantinv Asset Management Co, inspired by Bridgewater, recently unveiled its version of the "All Weather" strategy.
Yin Zhengxin, Luoshu's marketing head, envisions Chinese fund managers excelling in the "All Weather" strategy within 3-5 years, potentially challenging Bridgewater's supremacy, akin to Tesla's impact on the electric vehicle market in China.
The drive for stability amid uncertainty has led to substantial interest from Chinese investors. As Lv Chengtao, president of SHQX Asset, emphasized, their newly launched "All Weather" products attracted substantial investments in response to the strategy's popularity.
In response to this trend, Man Group's China division is preparing to offer mainland investors access to its AHL TargetRisk strategy, which is aligned with the "All Weather" concept.
The "All Weather" strategy, designed by Dalio in 1996, diversifies investments across various assets to perform well under all economic conditions. Despite challenges such as the Sino-U.S. trade tensions and the pandemic, Bridgewater China's "All Weather" product exhibited resilience and consistent positive returns.
Various Chinese hedge fund managers, including Jroyal Asset, Rongsheng Fund, and Shanghai Lanyin Capital Management Co, have introduced similar products, reflecting the market's demand for stability and risk mitigation strategies.
According to UBP's Asia senior economist, Carlos Casanova, Chinese investors are showing a strong inclination towards safety amidst concerns and uncertainties surrounding Trump's presidency inauguration.